ECONOMY

Will planned OSE privatization get back on track soon?

The government?s hopes of persuading the European Commission and the International Monetary Fund that the privatization of TRAINOSE, the operational arm of the Hellenic Railways Organization (OSE), is on track and will be completed within the year appear too ambitious.

Greece?s commitment in the bailout agreement is for a tighter timetable than the original, which had provided for TRAINOSE to be sold in early 2013. Government sources insist that the company?s privatization is a priority for the new administration, but the market considers that impossible.

During the previous negotiations with the Commission, the IMF and the European Central Bank — known as the troika — Athens had insisted on an extension to the completion of this sell-off project under the pretext of completing the full streamlining of the company so as to get the highest possible price. However, the troika eventually set a stricter timetable instead, arguing that the aim is for the state to free itself from the company?s losses and not necessarily to achieve the highest possible price.

Conditions for any interested party?s entry into the Greek railway market will also have to be set. The objective had been for a European railway company to be using the OSE infrastructure for a price by the second quarter of the year. Passenger transport permits were to be allocated after a tender. The carriages not used by OSE were to be transferred to an entity that would rent them out at market prices and following a tender. None of this has happened.

Upon assuming his duties last month, Development, Competitiveness, Infrastructure and Networks Minister Costis Hatzidakis said that his priorities included the streamlining of OSE with ?care regarding the interests of taxpayers and employees,? thereby making similar sounds to those he had made before the sell-off of Olympic Airlines. This statement has OSE staff particularly worried as they know that at this juncture there are no funds to ease their departure from the company, as had been the case with the national carrier?s employees.

The government now has to deal with a company whose active network has been reduced and in which there is no investor interest whatsoever. The companies that had shown an initial interest now argue that even with the company?s administration in the hands of a private investor, the cost-risk ratio would not be favorable on their part. Sources say that firms consider the investment to have particularly high risks with no guaranteed results.

Another obstacle is the fear of a strong unionist reaction to the government?s plans. There are also changes planned in work regulations and in the method of distributing shifts in a bid to avoid excessive overtime for some employees.